Sega, maker of the Dreamcast gaming platform, will change its business strategy in the face of its fourth straight quarterly money loss. Due mostly to price reductions for the Dreamcast console (projected at a US$171.3 million loss), Sega announced that it expects to have lost US$204.6 million (net) when its business year ends on March 31, 2001. Previous year-end estimates showed Sega clearing $13.9 million in net profit for the year. This loss, when combined with last year's loss of $397 million, has prompted Sega to look into focusing more on software than hardware, especially in light of Sony's PlayStation 2 release and next year's appearance of Microsoft's Xbox and Nintendo's GameCube.

Sega's new approach will be to license Dreamcast design tech to companies that make PCs, cellphones, a/v equipment, etc. It will also port its games to other gaming platforms. Further details were not given, but the gaming hardware market hasn't been kind to Sega. Even before the recent price cuts the company was losing almost $10 per console. While Sega won't completely pull out of making Dreamcast hardware, the emphasis on software and expanding the Dreamcast technology base is pleasing analysts.

Sega also wants to get the total Dreamcast consoles sold to 10 million by the end of March. Apparently, there are already 5.87 million in homes, and Sega sold an additional 1 million over the last two quarters. Sega is hoping that the holiday season and the PS2 supply problems will help it sell 2.1 million consoles in North America, 770,000 in Europe, and 730,000 in Japan over the next six months. That kind of base should be a great start to Sega's new direction.

SAM'S OPINION
This makes total sense to me. Common wisdom in the gaming console market for at least the past three or four years has been that the games themselves are where the money comes from, not the hardware. Fairly or not, the Dreamcast hardware never took off as it was expected to, so getting the “installed base” up to a sizable number and then getting the gaming software out to as many platforms as possible is a wise way to go.

Unfortunately, I can't find any information on what “licensing the Dreamcast technology” to other device makers means. What part of the Dreamcast hardware model is applicable to cellphones? I'm guessing we're just talking about the software tech that lets Dreamcast games play on other platforms, but maybe there's some hardware or coding aspects as well … miniaturization? color display tech? video compression? 'Net gaming protocols? I guess we'll find out sometime next year.

It will also be very interesting to see which other rival gaming platforms Sega deals with to get its software working on other consoles. It might be easiest to work with Microsoft, since Nintendo and Sony are rival Japanese companies and a deal with Microsoft would give the Xbox launch another first (multi-platform games) and more available games. For Sega, the Xbox will launch in the US first (we think), which would give it a jump on its rivals. Could be a nice partnership.

USER COMMENTS 45 comment(s)

Sega is dead…(1:20pm EST Fri Oct 27 2000)…long live Sega. – by Andrew

Isn't Dreamcast….(1:25pm EST Fri Oct 27 2000)…based on the WinCE platform? I think this is marketing hupla without any goods to back them up.

Unless they somehow tie in 'seganet' to work with the xbox? Or they just create games for the Xbox, and develop a nice trade-in offer for DC -> Xbox?

Sega makes great games, and is quite innovative as a company, but they have the suckiest marketing team of them all (unless you count the NEC Turbografix-16 marketing team…ughhh..). – by Godô

WinCE(2:43pm EST Fri Oct 27 2000)Dreamcast is based on WinCE but not all games take advantage of this. In fact, most game do not. The games that do, suck big time because WinCE was not written to make games for.

I have a dreamcast and love it. Very innovative and well though out games. Minimal third party support has killed the system. – by Diwali

Software programming….(2:55pm EST Fri Oct 27 2000)Does anyone know if game programming for the DreamCast is comprable to the Playstaion2? I know N64 programming is excruciating, and thus N64 sucks.

– by radiohead

Re: radiohead(3:55pm EST Fri Oct 27 2000)Since dreamcast is based on WinCE, it is fairly easy to port computer games from. A company is more likely to program a game for Dreamcast if they are already planning on making it for the PC. When X-Box comes out, a designer can program one game and easily release it for Dreamcast, X-Box, and PC.From all that I've heard, PS2 is really difficult to program for. It has been compared to the Sega Saturn (programming difficulty is partially what killed that machine before it ever got a chance). And on top of difficulty to program for, designing a game for PS2 is supposed to be *REALLY* expensive. Some games costing as much as the production of major movies. I doubt Sony will run into the problems that Sega Saturn ran into because it is selling the Sony brand-name as much as anything else. – by Sinix

Sega has been notorious for being the first to the block with a new, next generation system, then suffers greatly afterwards. Sega users are like Apple users, strongly dedicated, but don't grow significantly. The Dreamcast was Sega's greatest success, but have overestimated their growth and thus are paying for it. I am not saying that it isn't a good system, but it is being marketed by a company that just can't market their products.

Once the PS2 is in full production swing, and Nintendo releases their next gen kiddie system, Sega will drop back to third place like it aways has and will start “dreaming” up of the next version of hardware.

I think it is an appropriately named console. The Sega excest have big “Dream”s that are usually “Cast” asside.

As for programming, if you are a game developer, you hire programmers capable of doing what it takes to make your game available for the console platform. Anyone who says that Playstation is difficult to program for is smoking crack because they have the most games available out of all the systems. Also, most PC games usually port over very well, and quickly to PSX and vice versa, so the difficulty in developing for Sony isn't an issue.

Oh, and I don't believe that the X-Box will ever be a product. There is no reason for their not even being initial prototypes available and it is all just big hype by Microsoft. Actually their are prototypes available all over, they are called PC's. – by Yuppers

So sad, but we all knew…… (6:41pm EST Fri Oct 27 2000)Down With Sega!!

In my humble opinion(3:08am EST Sat Oct 28 2000)See, I just don't understand why all these millions and millions of dollars cannot bring these systems to rival the Super Nintendo Entertainment System. The SNES is still amazing. It's not cheezy like NES, and the gameplay is superb. The lack of worry about 3D interfaces and superb graphics is a plus, because the basic nature of the game brings out it's fun. Games like F-Zero, Illusion of Gaia, and Zelda:A Link To The Past were amazing on their own; unhindered by the graphics and difficult controls. All these revolutions have taken gaming a step backwards with each new release. – by the Curteye

Back to the future…(10:00am EST Sat Oct 28 2000)Didn't Sega make Frogger for the Atari 2600 and ColecoVision? It sounds like they are going back to their roots. However, CSK, Sega's owner, will eventually sell Sega and the potential buyers are AOL-Time Warner, and Europe's Seagram's Vivendi. Now that Microsoft is in the gaming console business, and Sony is firmly ensconsed in the business with the success of the Playstation franchise, AOL-TW is going to want to enter the business since both Sony and Microsoft will be deemed its chief competitor. Meanwhile, Vivendi considers AOL its chief competitor because its also a media and telecommunications company, so it will want some of the action. Therefore both these companies will want into the gaming business, and Sega is a cheap doorway. – by WebPilot

PS2, Dreamcast, and the PC(12:15am EST Sun Oct 29 2000)Money aside (this is for the gamers, not the budget savy)

GeForce2 Ultra. Thats why.. The card has double the memory of the PS2 or Dreamcast, (sitting at a whopping 64Mb), and outperfoms the PS2 at EVERY turn. Fill rates, triangle operations, memory bandwidth, clockspeed, the WHOLE works. My CPU (Athlon 700) outperforms the CPU on the PS2 as well. And with more games out than ANY console system combined, more developers than Sony or Sega will ever hope to get, more titles coming out in the next week than ps2 or dreamcast will have in a month, I will put my money on the real gaming system. the PC. – by Maelstrom

sleep with me(2:51pm EST Mon Oct 30 2000)no this i snot perverted….dreamcast is boring compared to ps2. I have both and the graffix are not even comparable. Dreamscast was innovative but not sold well making it just another system. – by gman

Re:by Maelstrom(11:57pm EST Mon Oct 30 2000)Your PC may have better specs, but the concoles will stil be faster, have better graphics, and speed. Why? Because console games are made specifically for what the console can do. Using the best resources. PC games have to be written to a lesser standard to accomidate the general public. The console games also get better over time using the reasources of the console wisely, not even slowing it down, where the pc games which get larger, slower and take all the computers resources. – by jammer-b

re: jammer-b(5:36pm EST Tue Oct 31 2000)dude have you even looked at the gforce 2 ultra that thing is mudering all competition and plus you are playing on a monitor that is capable of way more then any TV monitor and with pc you have the choice of thousands of controlers and for god sakes how many consoles can surf porn? – by MissileX

Porn on a Console…(9:52pm EST Tue Oct 31 2000)I suppose the Dreamcast could surf porn, since it has modem. – by pornster

microsoft buys out SEGA(11:43pm EST Sat Nov 04 2000)Here's Microsoft's chance to get the instant rights to hundreds of video games, and port them over to the XBOX . Daytona USA rules ! Virtual Fighter rules ! – by sanchez90023

fucked off!!(8:03pm EST Sat Nov 18 2000)i couldn't give a shit whats better!I own a dreamcast and love the little blighter with all my heart. This news can only be good for segaheads everywhere. One point i will make to pc users is that although the hardware in your machine may be faster/better/whatever you just have to look at the price difference. dreamcast beats pc and ps2 hands down on this point. i'm convinced it will see the machine through the long winter ahead. – by big dug

P2 sux(5:20am EST Sat Dec 30 2000)The ps2 realy suxs, im mean come on!look at the games, they are all sequals, i mean another Tecken game? So what if its backwards compatable with Ps1 games, Bleemcast on dreamcast makes it look a hundred times better!And the dreamcast is cheaper and has games that look unreal! Just compare DOA2 on the ps2 and DC, the Ps2 looks all lamre and has jagged edges. Were as the DC look smoth and silky. – by Vaughany

overclock dreamcast(1:57pm EST Fri Jan 05 2001)Is there any downloads, to overclock or upgrade Dreamcast? If so where?– by Ice Man

Oh please accept your defeat segamaniacs(6:05am EST Mon Mar 12 2001)I have a Ps2 and have no problems with it i don't even get into trouble comparing the 2 consoles even if not nowsoon Dreamcast won't stand a chance to the games to come but thats normal since Ps2 has better technology same as X-box will be better at least it should be compared with PS2 in case you don't know thats called evolution…As for PC fans Only one thing there is to say consoles are for games and if you want your pc to run as a ps2 you will pay lots more.If i want a pc i would buy the fuss about consoles and pc has no meaning.I now have a ps1 a ps2 and a dvd into one what more could i ask? Thats enough for me.As for the Graphics three words Gran Turismo 3 and thats just the beginning.and i don't mind knowing that the X-box will be better because thats evolutionand thats the end of it. – by Sniper

Overclock N64(12:41am EST Thu May 03 2001)

Also, I'd like to toss in my $0.02.XBox will KICK @$$! I mean really, progressive-scan DVD player, GeForce 3, great games, surround sound, the works. The PS2 has… maybe a total of one good game if you add all the parts together. And sure MGS2 is coming out. I'm not paying $300 just for one game! The Dreamcast does (at least) everything the PS2 does now – and it has some great games too. Skies of Arcadia, PSO, ChuChu Rocket (I know, I know…), Crazy Taxi, Jet Grind Radio, Shenmue, Rosh 2049, etc etc.The bottom line: Sony needs to get some decent games if they ever expect to make money. The Dreamcast has them beat in this area. And the XBox will be all over the market this fall. Sony had better have one great sales summer… or else… – by Greg

DA BEST SYSTEM(8:40am EST Sat Apr 27 2002)NINTENDO IS THE BEST SYSTEM IN THE WORLD – by poophead

all ya guys suck(8:43am EST Sat Apr 27 2002)Nintendo systems rock and u guys havent even said anything since may 2001 one u retards, so i am warning u, i am going to take over this site a screw it up in one week if u dont agree with me, I AM WARNING U!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11 – by sega sucks

i dont know what sources you guys rely on, but the dreamcast has the better hardware…. it has less memory, but faster and more video memory. and it has a faster cpu too! and it has a much better sound engine. th only prob is the lack of good games and the price they sold it for…. if they would have waited for the ps2 to come out they could have improved production and sold the dreamcast for less money and still gain money out of the console sell. – by ai

Console sux(9:01pm EST Tue Dec 31 2002)Console sux… its for simple minded men like ya'll… PC GAMIN' RULEZ!!! … by the way GTA3 looks better in the PC mr Sniper. – by Sniper's an Idiot

Console sux(9:01pm EST Tue Dec 31 2002)Console sux… its for simple minded men like ya'll… PC GAMIN' RULEZ!!! … by the way GTA3 looks better in the PC mr Sniper. – by Snipers an Idiot

DMW(10:36pm EST Thu Mar 18 2004)You have got to play Dawn of the Modern World. Multiplayer name is RuleTheWorld! Look for me! – by Tario

sega vs nintendo(4:02pm EST Wed Sep 15 2004)its been a close rival over the years I must say. It was a damn good one too.nintendo puts the fun in gaming, but sega is one step ahead…EVERYTIME. The dreamcast was released in 1998 with 128-bit hardware. Same with the PS2 xbox and gamecube. 3 years later these game consoles come out sega has em beat hands down hey im just a kid but it makes ******* sense right? – by by Me

Just got a dreamcast(8:46am EST Wed Jan 12 2005)Just got a dreamcast and I think its my fav console. I got one cd with all the NES games ever made and another with all the SNES games ever made. Right now im downloading one for gameboy and one for sega. So much we can do with it.

Plus I got the half-life unrelease w/blueshift. Fun playing that again. – by Justin Olanin

Nintendo rocks(11:11am EST Sun Feb 06 2005)that guy who posted somthin about sega sucking they dont suck u sob but they arent as good as nintendo GO NINTENDO!!!!!!! – by by me

Sonic Heroes on the dreamcas?(4:25pm EST Sun Aug 14 2005)well this i have recompiled sonic heroes from PC to DC and it's working perfect no slowdown or other, and i must admit that i have created an optimizer for the dreamcast so it compres from 16 mb to 60 and from 200 mhz to 450 mhz and it compresses the video memory to from 8 to 24mb – by Mitch

expansion of :Sonic Heroes on the dreamcas?(4:29pm EST Sun Aug 14 2005)and i have created an special verion of wince and i have runned HALO 1/2 on my DC – by Mitch

Shemale personals?(3:21pm EST Mon Aug 15 2005)Shemale personals

What The Fuck – by by me

sonic heroes??(2:45am EST Sun Nov 13 2005)mitch could u plz email me i would like to hear more about what u have been working on

DC is still alive many moders have done many things tothe DC and i am working on upgrading its hardware i hope me making a “DC2″ will open new doors to porting and emulating games on the DC and maybe other new things

also in the next 3 years there will be a DC gaming serverthanks to fullsail – by LordFenix

nintendo sucks dick!!!!!!! you loser fanboy(1:19pm EST Fri Dec 09 2005)nintendo sucks ass you loser fanboy your just mad because everyone dumps all over your loser company i don't really care for sega any more but if it wasn't for them then we wouldn't have the games we have today so stop your stupid babbling because more people in this fourm will choose sega over nintendo any day even me and i'm not even a sega fan!!!!!!!!!!!!! oh and you don't even want to count worldwide. – by mega man

nintendo sucks dick!!!!!!! you loser fanboy(1:20pm EST Fri Dec 09 2005)nintendo sucks ass you loser fanboy your just mad because everyone dumps all over your loser company i don't really care for sega any more but if it wasn't for them then we wouldn't have the games we have today so stop your stupid babbling because more people in this fourm will choose sega over nintendo any day even me and i'm not even a sega fan!!!!!!!!!!!!! oh and you don't even want to count worldwide. – by by mega man

Sega V Nintentdo,pt II(2:58pm EST Tue Jan 10 2006)By by me- You have no idea what you're talking about. First off, 9.9.99. Second, the DC and PS2 were the only 128-bit processors. Xbox had 2 64-bit processors, and NGC was some weird 4-32-bit thing. On paper, the processor speeds made it seem like theXbox and NGC could whip the DC, but my NGC has 'slowed down' incredibly, and I can't recall my DC ever doing it. – by dude

OMG(7:26pm EST Sun Jun 18 2006)Just thought I'd say that I think it's hilarious how long this news article has been hhere, its like looking into the past or something when you see all the comments from 6 years ago and stuff.

Oh and er… Sadly the Dreamcast did indeed die…

Doesn't mean I don't still love my own though. :D – by ThunderDragon1669